PrivatBank froze a client's account after they received 29,000 UAH from selling crypto assets on Binance. Here's the court's ruling on the matter.

A man received 29,000 hryvnias for selling crypto assets on the Binance cryptocurrency exchange. However, PrivatBank has blocked his account, prompting him to demand that the financial institution lift the restriction. This is stated in the ruling of the Ingulec District Court of Kryvyi Rih, published on September 23, 2024.

On May 16, 2024, the man placed an order through his electronic account on the Binance exchange to sell 699.63 USDT for 29,000 hryvnias. A buyer responded to his order. After the agreed amount was credited to his account, PrivatBank blocked this account, which holds 38,935 hryvnias, making it currently impossible to access the funds. The client requested an explanation from the financial institution regarding the reason for the account blockage. On June 10, 2024, he received a response stating, among other things, that the bank had suspended outgoing transactions using the payment card based on a complaint from a bank client who claimed that on May 16, 2024, they had been misled into transferring 29,000 hryvnias from their card to the citizen's account.

What did the court decide?

The court granted the man's claim. The joint-stock commercial bank "PrivatBank" was ordered to lift the restriction on the disposal of funds by unblocking the account and resuming outgoing transactions.

"The defendant did not provide the court with evidence of the plaintiff's involvement in financial transactions that exhibit signs of fraud or other actions related to the legalization of proceeds obtained through criminal means. Additionally, the case materials do not contain information indicating that illegal activities were conducted using the plaintiff's card. The defendant failed to provide adequate evidence of any wrongful actions on the part of the plaintiff; the electronic payment method used, and the reasons for such a suspension were not presented by the defendant, nor did the court receive such evidence. The Supreme Court, in its ruling dated January 30, 2019, in case No. 235/5538/16-c (proceeding No. 61-30301св18), concluded that the legality of blocking a card account is only possible if the bank subsequently takes actions defined by the Law of Ukraine on "Preventing and Combating the Legalization (Laundering) of Proceeds Obtained through Criminal Means and Financing Terrorism," as well as adhering to the timeframes for suspending financial operations and blocking the card. The duration of the plaintiff's account blockage indicates the illegality of the defendant's actions. Under these circumstances, JSC "PrivatBank" failed to prove the legality of restricting the plaintiff's access to his own funds and his right to freely dispose of them. Therefore, the bank's actions in blocking the card account opened in the plaintiff's name should be deemed unlawful, and thus the plaintiff's claims should be granted," the court emphasized.